The South China Sea is often presented as one of the world’s thorniest territorial disputes. A group of objective, completely disinterested observers, however, would likely find this characterization peculiar. Indeed, to these hypothetical people, it would seem painfully obvious what needed to be done to at least significantly reduce the tensions in the South China Sea. Such a plan would likely start with four simple steps:

Step 1: Put sovereignty issues to one side. These are too complex and too emotive to be solved in the foreseeable future.

Step 2: Establish who claims what. China, for example, is extremely protective of its sovereignty, but it has never made a precise declaration about which areas of the South China Sea it actually owns (vaguely drawing dashes on a map doesn’t count). Claims should be filed with the UN’s International Court of Justice by a certain date – complete with latitude or longitude coordinates – or be considered frivolous by the rest of the world.

Step 3: Use UNCLOS wherever possible. Here’s a happy coincidence: all South China Sea claimants have ratified the United Nations Convention on the Law of the Sea. That should make this situation so much easier to handle. For areas that are not contested, UNCLOS clearly lays out the rights of the claimant state and also of non-claimant states in territorial waters and exclusive economic zones. Any problems and the Convention (Article 279 ff.) also has a detailed dispute-resolution mechanism.

Step 4: Neutralize the contested areas. If the disputants really want to maintain peace and stability in the South China Sea – and they all say that they do – then they obviously need to draw up a set of rules governing what is and is not allowed in disputed zones. They could call it a Code of Conduct, or some something of the sort. Likely rules would include: the demilitarization of disputed areas; refraining from any provocative rhetoric or action, such as new construction projects on contested islands; no exploration for, or exploitation of, marine resources, unless the claimants agree to do it jointly; and the establishment of a dispute resolution mechanism, probably under the auspices of the ICJ.

It all sounds so simple. But beyond the realms of this “Fantasy Dispute Resolution” and back in the messy world of international politics, this tidy plan is a complete non-starter. The underlying reason for this is that different countries diagnose the South China Sea problem differently. Some think the situation is dangerous and needs fixing. Others, notably China, are actually quite comfortable with the status-quo.

For many observers, the recent disputes over Scarborough Shoal and other island territories have become a matter of great concern. Beijing is less disturbed, however. In fact, China’s strategy is to maintain this sometimes messy status-quo, while making outward demonstrations of being cooperative about seeking a lasting solution so as to guard against accusations that it is the problem. It calculates that these tensions are unlikely to lead to conflict, and that they are an acceptable price to pay for its continued ability to act with relative impunity in disputed areas. At the same time, Beijing doesn’t want to overstep the mark, which would harm its standing in Southeast Asia (many parts of which are pro-China), and invite greater U.S. involvement in the region.

Beijing’s grandest cooperative gesture to date was its establishment of the 3 billion yuan ($473 billion USD) China-ASEAN Maritime Cooperation Fund in 2011. Discussions are now underway about how this money can be spent in order to help implement the 2002 Declaration of Conduct (DOC) in the South China Sea. According to Ian Storey, a senior fellow at the Institute of Southeast Asian Studies in Singapore, this is all building up to a tenth anniversary communiqué to mark the original signing of the DOC. But is this really anything to celebrate? The DOC is a failed protocol that was never properly implemented – which is why momentum has built up behind the formulation of a new Code of Conduct. “China’s view is that some ASEAN members have repeatedly violated the DOC; that’s also the view of some of the ASEAN countries about China,” Storey remarks.

“But is China serious about an effective Code of Conduct?” he asks. “I think the answer is no. A really effective code would constrain China’s freedom of manoeuver in the South China Sea, and big countries don’t like that.”

The Philippines, Vietnam, and other interested parties have doubtless reached the same conclusion about China’s commitment to crafting a meaningful COC. Filipino proposals backed by Hanoi for a robust COC have already been diluted by other ASEAN members, for fear of antagonizing China. More recently, the July ASEAN Foreign Ministers Meeting held in Phnom Penh descended into a farce, with Cambodia, the current Chair, blocking constructive debate about the South China Sea dispute in defense of China’s interests. Cambodia has sold ASEAN out: in doing so, it has facilitated a Chinese policy of extraterritorial interference in Southeast Asia’s key institution. For China, it’s been a foreign-policy coup.

Indonesia – doing the job that Cambodia failed to do – subsequently showed ASEAN some leadership after the Phnom Penh fiasco, cobbling together a common position called the “Six-Point Principles on the South China Sea”. Though better than the Cambodian no-show, it’s a lax document that goes no further than calling for “an early conclusion” to the COC drafting process.

That won’t happen. China has already begun soft-pedaling on talks, which are now unlikely to happen until 2013 (the upcoming leadership handover in Beijing all but rules out near-term movement on what has become such a contentious issue). A new code is therefore unlikely to emerge before 2014 at the earliest.

It would be worth the wait, of course, if it was a business-like code that really sought to regulate the behavior of claimant states. But nobody expects it to be. “China will not accept anything that is mandatory,” concludes Carlyle Thayer, an emeritus professor at the Australian Defence Force Academy.

However, these attractive aspects of cooperative diplomacy are outweighed by Beijing’s instinct not to give any ground where sovereignty issues are concerned. “When it comes to high-stake, high-politics issues, such as territorial disputes and strategic rivalries, international agreements have limited impact,” suggests Zhang Baohui, an associate professor at Lingnan University in Hong Kong. “Overall I think China is a status quo power on the South China Sea issues,” Zhang but observes that upholding the status quo cuts both ways: China won’t facilitate a lasting solution, but it won’t be the one to provoke a confrontation either. It will only react forcefully to perceived provocations on the part of others, as in its recent dispute with Manila. At the same time, it will not hold back from pushing the envelope of acceptable behavior, such as upgrading Sansha to city status, for example, or granting new drilling rights to Chinese oil companies.

But what is China’s ultimate objective in all of this? “They just want to play for time, and to drag it out as long as possible,” argues Storey. “What is China’s end game? I don’t think they know themselves.”

Sadly, there is no Plan B for the South China Sea. China and ASEAN appear locked into the futile process of formulating a Code of Conduct that won’t address the types of conduct that actually need addressing. Pity the poor diplomats who will be spending the next two years working on it. The COC is another fantasy – only one that won’t sound good either in theory or in practice.